EnQuest's (ENQ) shares slipped nearly 4 per cent on the day these half-year figures appeared after the North Sea driller revealed another delay to first oil at the Alma/Galia project. Overall, however, the underlying performance was strong - particularly on production - although reported earnings were hit by a tariff increase at the Sullom Voe oil terminal in the Shetland Isles. Cash profit rose by a respectable 3.6 per cent to $284m (£168m) in the period, however.
Total production actually jumped 18 per cent year-on-year to 25,292 barrels of oil equivalent per day (boepd). Oil from Alma/Galia is now expected mid-way through next year, as opposed to the closing months of 2014. But management was able to reiterate full-year production guidance - despite the delay - due to an improved performance at the company's existing North Sea assets.
Production will also be bolstered by an initial contribution from EnQuest's new operating interests in the PM8/Seligi assets in Malaysia. These were acquired in June from US major ExxonMobil (US: XOM) and will immediately bolster production and revenues once the technical transition is completed. The assets are an ideal fit given EnQuest's strategic focus on maximising oil output from aging or marginal fields.
Bank of America Merrill Lynch expects full-year EPS of 17¢ (from 24¢ in 2013), rising to 26¢ in 2015.
| ENQUEST (ENQ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 120p | MARKET VALUE: | £962m | |
| TOUCH: | 119-120p | 12-MONTH HIGH: | 148p | LOW: 118p |
| DIVIDEND YIELD: | nil | PE RATIO: | 10 | |
| NET ASSET VALUE: | 193¢* | NET DEBT: | 46% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 456 | 141 | 12.2 | nil |
| 2014 | 504 | 79 | 7.9 | nil |
| % change | +11 | -44 | -35 | - |
Ex-div: - Payment:- *Includes intangible assets of $364m, or 45¢ a share £1= $1.69 | ||||
